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Finance for Females

Laws have changed during our country’s history to have equal rights for women and men. It’s hard to believe that the right to have birth control became legal during the lifetime of baby boomers. The progress is great, but women still have financial challenges that differ from those for men.

Women are still more often the primary parent in two parent families. This can impact the ability to accumulate wealth. One influence on earnings is some time out of the workforce. For a mother who takes even a couple of months maternity leave, this time generally comes during the time in her career when she’s either building her career or possibly during her prime earning years. The lifetime earnings of most individuals are a long term trend. Having an interruption – or more than one interruption – in a career can stunt lifetime earnings growth. Some mothers choose to take off more time away from the workforce while their children are at home. Those women who stay in the workforce while being a primary parent might have a limited ability to have flexible hours and they might miss more work than co-workers who are not primary parents. These issues are compounded if a woman is the primary caregiving for aging parents, which is also common.

All these factors can impact a woman’s ability to reach her maximum earning capabilities. Earnings flow directly into the ability to save for emergencies and future goals, like retirement. Basic math will tell you that if someone has reduced her total earnings by 20% to 30% over a lifetime, that will impact how much is available for saving. If a woman is in a two income family, the ability for both incomes available to meet financial goals might be sufficient.

What about women who are single? On average, women don’t make as much as men with comparable qualifications and jobs. While this income gap is narrowing, it still exists. Any single income household doesn’t have some of the expense savings of a two income household sharing some of the big expenses. Housing, utilities, groceries, and insurance can have savings for a household with more than one adult. Having lower earnings than a male counterpart can make it difficult for a woman to save.

Planning, preferably with some professional advice, can help overcome financial limitations. Have a plan that includes budgeting, proper insurance, home ownership, and staying away from unproductive debt. Saving early puts the power of compounding on your side. Start saving – even if it’s just a little – and keep saving. Get advice that doesn’t have a sales agenda. An advisor paid only through product sales might not be the most objective to help you meet your financial goals. A good advisor will give you advice that’s in your best interest. And if your questions aren’t answered to your satisfaction, get a new advisor.